Stricter checks of China bank card use abroad ‘negative’
The impact of a new Chinese government policy announced on Friday – that will require collection of information about overseas transactions exceeding RMB1,000 (US$147) that involve mainland-China issued bank cards – is “uncertain, but can’t be good”, said a Friday note from casino gaming sector analysts at JP Morgan Securities (Asia Pacific) Ltd. The new measure comes into effect on September 1.
“To be clear, the news has nothing to do with the gaming industry at this point, as there’s no change in foreign exchange policy (such as card limit, ATM [automated teller machine] quota), nor is there any mention of UnionPay [Co Ltd] pawnshop transactions or Macau in the statement,” wrote analysts DS Kim and Sean Zhuang.
But they added: “We believe increased scrutiny (or just the ‘perceived fear’ of such) of overseas card usage and cash withdrawals – which are probably among the most convenient ways to get money in Macau for cash players (i.e. all mass and some VIP players) – is at least a modest negative on player psychology, if not their abilities to source funds to gamble.”
China’s State Administration of Foreign Exchange (SAFE) announced the policy on Friday on its website.
Under the new rule, every cash withdrawal or merchant transaction above the RMB1,000 threshold – conducted via use of any mainland China-issued bank card, including debit and credit cards – has to be reported to SAFE on a daily basis.
Explaining the new rule, SAFE said there was a need – in its words – to enhance the transparency of statistical data related to overseas transactions on Chinese bank cards.
“Following the increasing demand to collaborate internationally on anti-money laundering, anti-terrorist financing and to counter tax invasion, there is a need to enhance the transparency of the statistics of cross-border transactions on bank cards as well as the quality of such data,” SAFE said on Friday.
SAFE noted that overseas transactions made using mainland-China issued bank cards exceeded US$120 billion in 2016.
A recent focus for the Macau government has been tighter controls on the large volumes of money flowing through the city’s casinos via VIP gambling.
The Monetary Authority of Macao announced last month the establishment of a “Financial Security Expert Alliance”. The body was formed in collaboration with the nation’s central bank, the People’s Bank of China; and the Hong Kong Monetary Authority, for the benefit of “national financial security and stability,” said the Monetary Authority of Macao.
The Macau government also announced last month that holders of Chinese mainland-issued China UnionPay Co Ltd cards that wish to use them for cash withdrawal at Macau ATMs would soon have to present their identity card and pass a facial recognition scan.
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